The former chief executive of the Financial Conduct Authority has told MPs he was not aware of the now scandal-embroiled London Capital & Finance until "pretty much the point at which it was closed down".
Speaking to the Treasury Committee in an evidence session yesterday (February 8) Andrew Bailey said his "personal involvement" in the case did not begin until the regulator had stepped in to shut the mini-bond provider down.
Bailey told MPs about 600 calls had been received by the FCA regarding LCF, and questioning the firm's status, but said he had "inherited no system for extracting information" from the calls.
"The contact centre in my time was receiving 200,000 calls a year and there was no system for extracting information from those calls."
"The red flags were buried in these 200,000 calls and there wasn't a system for extracting them, now I wish there was and we set to work...to do just that."
HM Treasury first requested the independent LCF investigation in May 2019 after the mini-bond provider collapsed owing more than £230m and putting the funds of some 14,000 bondholders at risk.
At the beginning of the evidence session the now governor of the Bank of England told MPs he was "responsible for everything that happened at the FCA" during his time at its helm, but it was the "broken machine" he had inherited that had failed.
It is an excuse which was heavily criticised by Dame Elizabeth Gloster, the author of an independent investigation into the FCA's handling of LCF, in her own appearance before MPs last week.
Speaking at the time Dame Elizabeth said Bailey was right to say he "inherited a difficult situation", but his apology did not "really address the problem" and did not provide an "adequate excuse" for the regulator's failures.
The name game
Whilst expressing regret over money lost by LCF bondholders, Bailey challenged some points made by Dame Elizabeth the previous week — in particular denying he asked for his name to be omitted from her final report published just before Christmas.
Last week Dame Elizabeth told the Treasury Committee she might have been "quite irritated" and "quite surprised" at FCA requests in the form of legal submissions to exclude the names of Bailey and two other directors from her final investigation.
She warned it was "inappropriate in quite a serious way" to and suggest their names should not be included in the report.
But hitting back yesterday an angry Bailey said there had been as "fundamental misunderstanding" and insisted he had only requested his name be withheld in relation to any suggestion of personal culpability in her draft report, not ultimate responsibility.
He said: "I am probably sounding quite angry now, and I am, because frankly...maybe this is just a misunderstanding...but it is a very serious issue to raise and the representation was just never made in that context."